The party’s private members’ motion also addresses the issue of credit availability for SMEs and the escalating mortgage arrears crisis.
The party’s Finance Spokesperson, Deputy Michael McGrath commented: "State-owned Permanent TSB is still charging a standard variable rate of 5.19% to its existing mortgage customers - that’s over 2% higher than another state-owned bank AIB (3.04%). This exorbitant interest rate is crippling thousands of families around the country and needs to be addressed urgently. The variable rate customers of Permanent TSB should seize this opportunity to raise this issue with their local Government TDs and ask them to support the Fianna Fáil motion.
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"Last November, the Government put pressure on AIB in a very public manner to reduce its standard variable rate in line with an ECB rate reduction. In contrast, the Government is adopting a markedly ‘hands off’ approach when it comes to the rate charged by Permanent TSB.
"In a normal functioning market, customers would be able to switch to another lender offering a more competitive rate. However, due to the lack of a normal credit supply in the market, Permanent TSB customers are effectively trapped in expensive mortgages, adding hundreds of euro to their monthly repayments in many cases.
"In the case of a family with a €250,000 mortgage over 25 years, the annual repayment on a Permanent TSB standard variable rate mortgage is €3,582 more than AIB. That’s an extra €300 per month because of the higher interest rate being charged. Over the lifetime of the loan, this mortgage-holder would end up repaying €90,000 more than an AIB customer for example. This differential is completely unacceptable.
"Our motion is also calling on the Government to change the basis of measuring the lending performance of banks to the amount of new credit drawn down as opposed to the current measure of new credit approved. The credit approval measure has shown itself to be open to manipulation by the banks. The key test is the amount of new credit drawn down by SMEs and put into circulation in the economy and this is the measure that should be used."
(CD/GK)
